Why become a certified B Corp? 5 key benefits outlined

29 March 2024 Consultancy.eu 5 min. read
Profile
More news on

There is a lot of buzz around companies wanting to become B Corporations. But what is the hype all about? To cut through the noise and dive into the key benefits of becoming a B Corp, we spoke with Matthijs Germs from sustainability consultancy Nexio Projects.

A company that is certified as B Corp is a business that carefully balances profits with social and environmental goals. These companies meet rigorous standards of social and environmental performance, transparency, and accountability.

“Amidst a landscape of increased environmental consciousness and regulatory pressures, businesses are now more than ever under pressure to improve their sustainability practices and communicate them,” said Matthijs Germs, senior consultant at Nexio Projects and lead of the B Corp practice.

Why become a certified B Corp? 5 key benefits outlined

“Simultaneously, the rise of environmental, social, and governance (ESG) criteria in investment decisions underscores a growing trend, wherein capital is increasingly channeled towards businesses with a strong commitment to sustainability.”

But with increased scrutiny and a dizzying array of regulations, disclosures and pressures from stakeholders, there can be some confusion around sustainability. B Corp certification is a way to verify a company’s sustainable performance, accountability, and transparency through an independent platform that aligns to the very highest standards.

So what are the actual benefits of a B Corp certification?

Get a competitive edge

“In an era of ‘greenwashing’ and misleading labels, certified B corporations serve as reliable markers for discerning consumers. Rigorous certification processes and standardized impact assessments ensure elevated scrutiny, fostering accountability and transparency,” noted Germs.

There is a lot of networking and strategic partnerships between B Corp companies, which are most often at a high level of maturity. That is a recipe for setting them apart from the rest of the market.

Attract investment

Millions of euro’s have been invested in ESG initiatives as the world moves towards greater sustainability and stakeholders demand positive change in that regard.

“B Corporations, inherently aligned with these values, have become increasingly attractive to a growing number of investors. The latest Global Sustainable Investment Review noted that sustainable investments accounted for over $30 trillion in assets, reflecting a 68% increase over four years,” said Germs.

Sustainability and social responsibility are strong attractors for investment because companies (like B Corps) that can show impressive ESG markers are considered more future-proof than companies that prioritize short-term profit. JP Morgan estimated that the market for socially responsible investing is estimated at up to $1 trillion.

Why become a certified B Corp? 5 key benefits outlined

Boost resilience

“One notable advantage of B Corp certification lies in the resilience it provides to a company's corporate structure during periods of economic instability,” says Germs.

“By voluntarily undergoing a rigorous certification process, B Corporations showcase their commitment to meeting high social and environmental performance standards. This proactive stance aids in mitigating regulatory risks by ensuring that a company's practices align with current and future regulations.”

B Corps were shown to have had a 63% higher likelihood of surviving the devastating 2008 recession when compared with companies that did not have the certification. The survival rate for B Corps is above 90%, while the average company only has a survival rate of around 70%.

Prove credibility

Walking the talk is one of the most important aspects of being B Corp. Consumers are increasingly demanding authenticity and transparency, especially when it comes to sustainability and social responsibility. Younger consumers are leading the call on this, which means it will only get louder.

“B Corps are held to rigorous standards, and the certification process is a thorough evaluation of a company's impact on workers, customers, community, and the environment. This authenticity enhances brand reputation, fostering trust among consumers who are increasingly skeptical of greenwashing,” notes Germs.

Inspire talent

“Top-tier employees increasingly seek purpose-driven work environments, and B Corporations, by design, champion a triple-bottom-line approach, prioritizing not only profits but also social and environmental impacts,” said Germs.

“This commitment to a broader mission fosters a profound sense of purpose among employees, resulting in elevated job satisfaction and increased retention rates.”

B Corporations are more likely to foster a higher level of employee commitment. Millennials, who will make up around 75% of the workforce by 2025, are far keener on making sure the company they work for is up to their standard of social and environmental responsibility, with a recent survey showing 64% consider this when choosing where to work.

Above all, when a company shows they have what it takes to be a B Corp, they are cutting through the noise and leading by example.

“Beyond representing a moral imperative, becoming a B Corp stands as a strategic decision harmonizing with evolving regulations, appealing to investors, retaining top-tier talent, mitigating regulatory risks, and bolstering brand credibility.”